Talking Points

USDA's Standard Reinsurance Agreement

Crop Insurance

• In 2009, crop insurance protected more than $80 billion of America's food supply.

• Crop insurance provides a safety net against the inherent risks and potential for widespread catastrophic losses associated with agricultural production.

• Crop insurance must respond to the complexities of the marketplace and the exacting requirements of the USDA and state-level insurance regulators. Insuring agriculture is a complicated business. It is not the same as insuring a house, or a car, or a boat.

• In 2009, 80 percent of insurable farmland in the U.S. was protected through the 1.2 million Federal crop insurance policies, insuring more than 100 individual crops on more than 264 million acres.

• Crop insurance enables farmers to borrow money to expand and improve their businesses, as well as have the security that enables them to forward market their crops.

How the Federal Crop Insurance Program Will Keep America Growing

• With tightening credit in the agricultural economy, volatile commodity prices and the ever-present severe weather events, the Federal crop insurance program is of greater importance now than ever before.

• The Federal crop insurance program is not static. It is constantly evolving to meet the needs of today's agricultural producers and it is performing at a high level. It is essential to maintain the current level of funding so that the program can continue to provide a measure of stability in an increasingly unstable economic climate.

• The crop insurance industry is working with its partner, the Risk Management Agency, to improve the program so that we are able to meet challenges and protect the American farmer, which we know is in all of our best interest.

• The crop insurance industry will work to maintain the integrity of the program.
  
  
  • While the industry continues to work to protect the program against fraud, the rate of fraud in the crop insurance industry is very low. According to Dr. Bert Little of Tarleton State University, it is less than one-half of one percent. Fraud rates in other lines of insurance, such as property and casualty, are significantly higher.
    
    
  • Employing sophisticated technology — such as data mining and satellite imaging — the RMA and the industry have been working together to detect problems and prosecute those who attempt to defraud the program. Our industry has a zero tolerance for fraud.